Why Some Investors Are Buying German Bonds At A Loss
Germany's debt is now selling at a negative yield, which means investors are paying Germany so they can lend the country money.By Kate Grumke | February 25, 2015
In a rare move, investors are buying German bonds at a loss — so they're essentially paying Germany for the opportunity to lend it money.
On Wednesday, Germany issued its first five-year bonds with a negative yield. It sold 3.3 billion euros of debt at a rate of -.08 percent, according to the country's central bank.
"Negative bond yields is a most amazing phenomena. We have seen them once or twice before in past history but this could be the making of a completely new environment for global bond markets and how investors respond," Andrew Milligan, Head of Global Strategy for Standard Life Investments, said.